British expat pensioners who retired to Europe have seen their cost of living double at the rate of UK inflation in recent years.
Their spending power has reduced at double-quick time compared to pensioners who stayed in the country.
Since the General Election in May 2015, expat inflation has increased by 14%, compared with 7% in the UK, says payment specialist Equiniti, which manages pension payments for 60,000 expats.
The firm handles retirement payments for more than 6,000 pensioners in the EU, but believes more than 200,000 have suffered a hit on spending power.
The bad news is expat pensioners elsewhere in the world have also seen inflation, currency fluctuations and other economic factors erode their spending power.
Only place where spending power increased
The only place where pensioners have seen retirement finances work in their favour is South Africa, where income has increased by 3% thanks to currency movements.
Pensioners in the United States have suffered the same fate as expats in the EU, having seen their spending power drop by 14% as well.
Andy Brown, director of payment services at Equiniti, said: “Expat pensioners are always at the mercy of the currency exchange rollercoaster, but after a period of considerable uncertainty they will be facing a significant increase in the cost of living.
“Our advice to anyone thinking about retiring abroad is to understand the implications of currency exchange rate movements and also look at the numerous ways in which to receive international payments as the ‘headline’ exchange rate is not necessarily an indication of the total cost of the transaction.”
Cost of living comparison – UK expat pensioners
|Currency||Purchasing Power of a £5,000 pension @ 7 May 2015||Purchasing Power of a £5,000 pension @ 17 May 2019||% change|
|Exchange Rate||Value (£)||Exchange Rate||Value (£)||2015 – 2019|
|New Zealand Dollar||2.04||10,200||1.98||9,893||-3%|
|South African Rand||18.3||91,500||18.85||94,273||3%|